April 21, 2024

Retail Sales Rise, but Below Forecasts

Sales at discount stores increased 7.8 percent in May, the best showing by any group of retailers in terms of sales last month, according to a survey of 25 retailers released on Thursday.

But sales at stores that have been open at least a year, known as same-store sales, compiled by Thomson Reuters, rose 4.9 percent in May, slightly below the 5.4 percent that analysts had forecast. It was also below the 8.9 percent growth in April, which was one of the biggest increases in the index in the last few years.

Analysts said the May figures reflected the continued pressures on consumers from an uncertain jobs market, a depressed housing sector and the recent rise in gasoline prices.

Sherif Mityas, a partner in the retail practice at A. T. Kearney, a global management consulting firm, called the results “a bit underwhelming.”

He added: “In totality we are still seeing significant headwinds from a consumer confidence perspective,” he said. “You are seeing that show up in consumer retail sales.”

The monthly survey of same-store sales is used as a gauge for buoyancy in the retail sector and the strength of consumers. It was released a day before the Labor Department’s monthly report on the jobs market. Analysts are forecasting an unemployment rate of 8.9 percent, down from 9 percent, and the addition of 170,000 jobs in May, although other jobs data this week has raised some concerns about whether those expectations will be met.

Economists said higher food and gasoline prices, although they have been moderating recently, have taken their toll on retailers. With some people out of work and a depressed housing market, “people are feeling less confident about where their money is going,” Mr. Mityas said.

“The American consumer is still unfortunately focused on their needs when they open their wallet,” he said.

Still, the Thomson Reuters survey also suggested that while discount consumers were seeking bargains, more affluent consumers were feeling less of a pinch. Retail sales at department stores rose 3.8 percent, but that was below the 4.5 percent increase expected. Apparel for teenagers did well, climbing 4.5 percent, slightly above expectations of 4.2 percent.

Another survey, from the International Council of Shopping Centers, released on Thursday found a gain of 5.4 percent in May retail sales from May 2010.

Neither survey includes Wal-Mart.

Chris G. Christopher Jr., the senior principal economist for IHS Global Insight, said: “The fact that luxury stores are plowing ahead gives some credence to suspicions that the high-end American consumer is pulling out of the recession relatively well, while the rest are having their incomes swallowed up by higher food and gasoline prices.

“In addition, shoppers are increasingly shopping for clothing from discount stores and staying away from the more expensive apparel outlets,” he said.

The Thomson Reuters survey accounts for sales in the four weeks through May 28. It quoted some retailers as saying that unseasonably cool and wet weather in the beginning of the month hurt traffic, but as the weather turned warmer near the end of the month, business picked up.

Same-store sales at Saks jumped 20.2 percent in May. In a statement, Saks said that a four-day sales event helped push up May’s results.

Costco was also strong, with a 13 percent rise.

Macy’s reported same-store sales were up 7.4 percent. The department store chain said in a statement that it was raising its guidance to a 5 percent increase in same-store sales for the second quarter from the previous estimate of about 4 percent.

Macy’s includes online sales in its same-store sales calculations.

Mr. Mityas said Saks and Macy’s were pursuing consumers with better pricing and merchandising. “They are clearly setting the bar,” he said.

Nordstrom said sales were up 7.4 percent.

Among the companies that missed forecasts by the biggest margins were Destination Maternity, which showed same-store sales declining 8.6 percent, worse than the decline of 1 percent forecast by analysts.

Same-store sales at J. C. Penney, which had been expected to show a 3.3 percent rise, fell 1 percent.

Gap and Stage Store also fell short of forecasts.

The teenage apparel retailers Buckle and Zumiez beat expectations, with same-store sales rising 8.8 percent and 7.8 percent, respectively, in May.

Article source: http://feeds.nytimes.com/click.phdo?i=b2e2aa0c156916828ae17bb57eb3f74e

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